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Bad debt rates will be rocketing. I think it may be game over for this business.

why would you wait for markets to correct before buying?

A couple of reasons: 1) They are still holding some legacy investments in Botswana and Zimbabwe that they paid way too much for. 2) Why pay these idiots money when you can just get direct exposure to Nigerian Banks.

Basically this was a lazy and naive business started by Bob Diamond, a first class douche who has no idea about Africa or its Banking systems. The terrible reduction in the share price since inception reflects this. I'd maybe buy in at 10p!

totally agree. 135p would be a bargain price.

On what basis are you saying it will hit 250p?

And its still a piece of ****. It should have just been broken up slowly. Since Hester left the people running the bank have been fairly talentless. There is no value in this company and no prospect of it improving. It can change the name above the door from RBS to NatWest, but the issues will remain.

This was an amateur mistake. The SP has already lost most of the gains from the last earnings announcements. Having had time to fully absorb the numbers, the market has been less impressed.

An expensive way of attracting more investors given the liquidity issues they face with the time to sell each receivable getting longer and longer

what makes it look attractive?

As the article points out, 93 days to sell a loan now. The issue has become perpetuating. The longer its takes, the less likely investors will put more cash in, thereby worsening the liquidity position. Put simply, the model is shrinking in the face of a threat of a slowdown. We haven't even seen a recession yet. If/when we do, I can't see this company enduring.

FCH faces a dichotomy in that to grow the loan book to reduce costs per transaction, they will either need to lower their net margin or loosen their lending criteria. I'd say the lending criteria is probably already fairly loose, so if they lower net margins, i.e. make it cheaper for people to borrow money from them, they will be less attractive to their depositor base.

The reality is, its very hard to make money lending to SME's. FCH are up against professionals such as Close Brothers and Aldermore, plus lots of smaller niche players. These guys have been in the industry a lot longer than FCH, which has yet to experience a recession. The recent performance of Metro Bank - a stock everyone was excited about a couple of years ago - is a great example of difficult it is for challengers in an already competitive space.

@Utahsaints, I'd say your prediction of a drop to 3 is likely. This co is phony fintech (like most in its sector), and it will struggle from the dual effects of a higher interest rate environment; higher defaults and savings more motivated to keep money in the back.

I'm glad that I haven't followed the advice of some which was to buy some of the these and hide them away for 10 years. The only thing you'd come back to is a big fat zero. I think Bob is finding that it was easier to take a big bonus for what soon became dubious results at Barclays. It's a lot harder being a real finance entrepreneur and buying up a large chunk of the most poorly run Bank in Nigeria won't lead to much.

Good to see him putting a bit more skin in the game. I'd like to think he knows something we don't, and that we'll see improvement in the sp over the coming months.